Malaysian palm oil futures closed higher on Thursday, supported by ongoing supply squeeze fears, according to market reports. The benchmark contract edged up as traders weighed tightening near-term availability against lackluster physical demand.

Price Outlook Remains Capped The Malaysian Palm Oil Council has projected crude palm oil prices will stay within a RM4,400–RM4,650 per tonne range for August, reflecting a market caught between bullish supply fundamentals and bearish demand signals. Analysts at UkrAgroConsult echoed this view, noting that vegetable oil quotes are rising but purchase prices on physical markets remain limited by low buyer appetite.

Demand Dynamics: India in Focus India's edible oil imports are expected to surge from July through October as supplies tighten ahead of the festival season, according to The Economic Times. However, a parallel rise in duty-free imports from Nepal—up 548% year-on-year—is adding pressure on domestic processors and complicating the import landscape. Experts have urged New Delhi to make edible oil import duties more flexible to manage price volatility and protect local industry.

Biodiesel Boost and Regional Shifts Indonesia's rollout of the B50 biodiesel mandate continues to underpin long-term demand expectations for palm oil. The programme, launched earlier this month, is seen opening growth opportunities for Malaysian palm oil as well. Meanwhile, Thailand's tightening of palm oil exports is reshaping regional supply dynamics, adding another layer of support to prices.

Weather and Energy Support El Niño fears and a broader biodiesel boom have tightened global supply, with palm oil surging in early July. Stronger crude oil prices and gains in the broader vegetable oil complex have also lent support, even as a firmer ringgit occasionally caps upside.

Takeaway for Buyers With CPO prices locked in a narrow range and physical demand subdued, the key watchpoints are India's festival-driven import surge and the pace of Indonesia's B50 implementation. Any disruption in supply from major producers or a shift in energy markets could break the current range. Monitor monthly MPOB data and export trends for early signals.